Car industry saves the world?

Unlikely isn't it? But one of the most important pieces of environmental policy in the world is currently making its tortuous way through the European Parliamentary process, which if approved will result in new car CO2 emissions being reduced by nearly 40% by 2020.

That's dreamy stuff for climate campaigners, a real policy that would put us well on track for the drastic 80% cut we need by mid century; a refreshing change from the crazy disconnect apparent everywhere else, with airport and coal power expansion seriously discussed by adults even as the arctic ice disappears before our eyes.

But yes, MEPs are on the verge of approving proposals for new cars sold in the EU to emit an average of 130g/km by 2012, and 95g/km by 2020. By comparison the average new car sold now in the UK emits 165g/km. Improvements on this scale hold out the prospect of a sustainable future for the auto industry, rather than flagging in the face of oil and carbon constraints. But can the industry achieve these kinds of improvements, given they've only managed a 13% reduction in the last 10 years?

On the face of it 130g/km - or even 95g/km - should hardly be a challenge, given we have many models on the road right now that achieve 130g/km, and even a handful approaching 95g, while practical new plug-in hybrids from Toyota and GM which will go further still are already in pre-production testing.

But the car industry has never been about practicality - it's about image, power and glamour, and the biggest profits have come from selling the biggest, thirstiest chunks of metal. The industry faces having to turn around its marketing messages if it is to sell as well as build more efficient cars. Little wonder therefore that it is the German auto industry with its luxury brands that has been at the forefront of industry efforts to water down the EU proposals.

Of course, there is a long tradition of reaction to environmental - and even safety - measures, with seat belts, airbags and catalytic converters all opposed in their day. But the industry should think hard before such a knee-jerk reaction this time.

The EU proposals are not only a major step towards climate stabilisation, they may represent salvation for the car industry as oil supplies decline. The recent oil price hike has hit vehicle sales worldwide, and getting away from the old bricks-on-wheels business model should be a priority for the EU industry. A legal framework which accelerates that process will leave them leaner as well as cleaner, and ready to supply the high efficiency vehicles which will leave us best off, in every sense, in the years ahead.